Item 9BCITY OF
SOUTH LAKE
MEMORANDUM
July 27, 2011
TO: Shana Yelverton, City Manager
FROM: Stacey Black, Director of Human Resources
SUBJECT: Approve a Market Adjustment to the City of Southlake Employee
Compensation Program.
Action
Requested: Approval of a market adjustment to the City of Southlake Employee
Compensation Program.
Background
Information: City Council adopted the compensation program and philosophy when
it adopted the Fiscal Year 2007 budget. The City's compensation
philosophy is to establish and administer an equitable program that
provides for consistent treatment for all employees. The objectives of
the program are to maintain a compensation program that is internally
equitable, externally competitive, affordable, easy to understand and
administer, and is aligned with the City's Strategic Management
System. The primary goals of the compensation program are to 1)
maintain a competitive edge; 2) attract and retain a quality workforce;
and 3) be fiscally sound. To maintain a competitive edge the City
adopted a philosophy of maintaining a market position of 103% of the
weighted market average of its market cities.
Except for a one -time cost of living lump sum payment, all employee
pay was frozen in the Fiscal Year 2011 adopted budget and also in the
Fiscal Year 2010 adopted budget.
Each year, Human Resources conducts a salary survey to assess the
City's position relative to the market. The survey captures data from
twelve market cities and 70 benchmark positions. To determine the
current market position of a pay plan, the survey compares the
midpoint of each benchmark position within a pay plan to the weighted
market average of the index cities.
This year, the survey found that the non - exempt pay plan lags the
desired market position by 4 %, the exempt pay plan lags the market by
2 %, and the DPS pay plan lags the market by 7 %. In addition, it found
that a small number of executive positions also lag the market by
varying degrees.
Shana Yelverton, City Manager
July 27, 2011
Page 2
Survey Results
Pay Plan Desired Market Position Current Market Position Lagging
Non - Exemp I _
1 03%
99%
4%
Exempt
103%
101%
2%
DPS
103%
96%
7%
In order to attain the desired market position, each pay plan requires
adjustment. This is accomplished by moving each pay plan structure
upwards and providing employees with raises equivalent to the shift.
Staff recommends implementing a market adjustment effective July 1,
2011 by bringing the non - exempt and exempt pay plans to the desired
market position and by bringing the DIPS pay plan to 101% of the
market. This will result in an average employee pay increase of 3.9 %.
In addition, a small number of executive positions will also be adjusted
to align with the market. Adjusting the pay plans satisfies two of the
goals of the compensation program: 1) to maintain a competitive edge
and 2) to attract and retain a quality workforce.
Financial
Considerations: The Fiscal Year 2011 General Fund estimated financial impact is
$176,686 and the Fiscal Year 2011 Utility Fund estimated financial
impact $16,796.
Funding for this request is available in the adopted Fiscal Year 2011
Budget due to personnel vacancies and other various reductions in
cost. Therefore, an amendment to the adopted Fiscal Year 2011
budget is not necessary.
The Fiscal Year 2012 estimated financial impact to the General Fund is
$666,903 and the Fiscal Year 2012 estimated financial impact to the
Utility Fund is $62,384.
Citizen Input/
Board Review: N/A
Legal Review: N/A
Alternatives: Deny the request to provide a market adjustment to the compensation
program. Employee pay will remain at the originally budgeted FY 2011
level.
Shana Yelverton, City Manager
July 27, 2011
Page 3
Supporting
Documents: N/A
Staff
Recommendation: Approve the market adjustment to the City of Southlake Employee
Compensation Program.